Irreconcilable Differences: Let's Divide America in Two

Written by: Anton Wahlman12/20/12 - 6:00 AM EST

NEW YORK ( TheStreet) -- From the fiscal cliff to gun rights, from divisive social issues to
mandatory health care insurance -- America is more divided between red
and blue than even the 1860s. We are a nation that is trying to
compromise between driving on the right side of the road or on the
left side such as in the British Empire and Japan.

In this chaotic mix of trying to drive a little bit on the right side
of the road and a little bit on the left, there is not only almost
zero economic growth and legislative stalemate, but also eternal
strife ahead. Each side will not yield, and the result will continue
to be societal unhappiness and massive waste of productivity.
Gridlock defined.

The creation of America in the 1770s was about freedom of choice. The
options to mankind were to be expanded from a few monarchies in
Europe to a new form of a country on the other side of the Atlantic
Ocean. This birth of freedom ignited the greatest expansion of
economic activity, standards of living and average biological
longevity in history.

In those colonial days, however, the U.S. population was less than 1% of
what it is today. The U.S. population has increased more than 100-fold
in 236 years. We often wonder why small countries with only 10 million or 30
million people can exhibit so different social characteristics than
the U.S. Well, one of those reasons is that they are so relatively
small -- 10 million or 30 million people isn't 300 million.

Trying to keep 300 million people of widely different ideological
beliefs together under an umbrella of ideological rigidity only lasts
so long. We saw this with our Cold War adversary the USSR, which in
1991 dissolved into a broad set of republics.

Considering the current fundamental disagreements about taxes,
government spending, regulation, government deficits and debts plus
all the other socio-cultural issues, one can make the argument that we
now have the following three options in the years ahead:

Hold hands in continuing economic paralysis, leading to the
ultimate bankruptcy and hyperinflation. No balanced budget ultimately
results in the government printing the difference. With
hyperinflation comes the total societal collapse, such as in Germany
in the 1920s.

Civil War. Yeah, another one. Irreconcilable differences without
divorce can result in spousal abuse. Witness what happened in
Yugoslavia in the 1990s and in Syria today.

Amicable divorce. This is what happened to, for example,
Czechoslovakia in the early 1990s. Two countries emerged without a
shot being fired and they have both seen increasing relative
prosperity to varying degrees. It's a success story.

Any fourth "option" is a pure fantasy and product of utopian wishful
thinking. Each side of the political divide may believe that it will
prevail forever, suppressing the other side into a compliant and
irrelevant minority. History does not speak well to this kind of
prospect.

So what is America to do? It is clear to me that America needs to be
split up, into at least two countries. At over 300 million people,
the conglomerate has become one that business schools would use as a
case study for unlocking the value by divestitures. Any corporation
with over 300 million people is probably way too big, with massive
inefficiencies and lack of management accountability.